Using Bitcoin to evade foreign exchange supervision, 6 Chinese people face 2 – 4 years in prison

Six Chinese people helped South African migrant workers by selling the RAND for Bitcoin and BTC for CNY. They were arrested by the Chinese police and are currently facing two to four years in prison.

Encouraged by interests, take advantage of Bitcoin, ignoring foreign exchange control policies

Since 2019, suspect Zhuang and defendants Lin, Xue, Chen, Fan, and others have taken advantage of crypto to collect large amounts of money from overseas migrant workers and convert them into Bitcoin, then sell them through local exchanges like abinet.com and alenet.com. Then, transfer the yuan received from the BTC sale to the domestic yuan account of the migrant worker abroad, thus avoiding the state limit of $50,000/person per year for bank foreign exchange transfers.

To ensure profitability, the criminal group developed a “crawler” small program to monitor the changes in the exchange rate of RAND against the Renminbi in real-time, and then send it to the relevant trading groups as a reference for the criminal group to acquire RAND.

Due to the serious circumstances of the case, the Runzhou Procuratorate quickly mobilized key forces to intervene in advance of the investigation. In response to traditional supervision methods that cannot trace the source and whereabouts of virtual currency funds and the determination of the amount, the prosecutor put forward 8 opinions on investigation and evidence collection and guided investigative agencies to conduct inspections on the computers, mailboxes, and online disks involved in the case. Since then, more than 20 evidence materials such as transfer records and bank statements have been supplemented and improved.

However, the Chinese court also pointed out that buying and selling virtual currencies such as Bitcoin is not a violation. A person who only participated in the purchase and sale of Bitcoin but did not participate in the reselling of RAND was released.

On this basis, the Runzhou District Procuratorate fully explained the law and urged the defendants to confess their guilt voluntarily, and punished them following the law. Based on comprehensive consideration of the circumstances of the crime, the number of crimes, and the case circumstances, the Procuratorate of the 6 defendants proposed for two to four years following the law. Recommendations for determining fixed-term imprisonment or probation, fines ranging from 50,000 yuan to 400,000 yuan, and prosecution.

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